Ethos plc is a major, graphic design company. One of Ethos' directors, Mike, is in extreme financial difficulty and is close to having to declare himself bankrupt (which would make him ineligible to act as a director of Ethos). Accordingly, to prevent this, the other directors of Ethos cause the company to lend Mike 150,000. The transaction is disclosed at a meeting of the directors and the directors unanimously agree to authorize the loan. Mike was present at this meeting, but did not vote on whether the loan should be made. Ethos' Articles of Association state that 'Ethos plc may engage in any activity directly related, or incidental to, the carrying on of a graphic design business.'

The directors of Ethos cause the company to lend 500,000 to Wanjiku, who will then pay off the loan over a two-year period. Wanjiku is a major client of Ethos, but aside from this, she has no other links with the company or its directors. A number of Ethos' members hear of the loan and argue that Wanjiku must repay the money immediately. The board of Ethos discover that Asset Strip plc is considering a takeover bid of Ethos. Asset Strip plans to break up the various parts of Ethos and sell them off individually and to remove the company's directors. Ethos is making a considerable profit and the directors genuinely believe that it would not be in the interests of the company or its members for Ethos to be taken over by Asset Strip. Accordingly, the directors cause the company to issue new shares to Sylvia an existing member who is known to oppose the takeover with the aim of preventing the takeover from succeeding.

Required: Discuss whether or not Ethos or any of its directors have breached the law.